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Basic Question 7 of 8
An investor is currently considering the choice between a corporate and a municipal bond. The yield on these two bonds is given below.
10-year corporate bond: 6.43
10-year municipal bond: 5.20
B. 4.44
C. 4.63
Securities: Yield
10-year corporate bond: 6.43
10-year municipal bond: 5.20
The investor's marginal tax rate is 28%. What is the after tax-yield on the corporate bond?
A. 3.74
B. 4.44
C. 4.63
User Contributed Comments 1
| User | Comment |
|---|---|
| DonAnd | u could imagine the question specifically asks for the after-tax yield on the CORPORATE bond and silly me calculated for the municipal bond....ahhhh!!!! careless!!!!! |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
describe how legal, regulatory, and tax considerations affect the issuance and trading of fixed-income securities
CFA® 2024 Level I Curriculum, Volume 4, Module 2.